The New Zealand Dollar has been trading in a rising wedge against the Loonie for four months. The pair has likewise formed a short-term channel up valid since early January. The rate’s failure to reach the upper wedge boundary last week suggests that a possible breakout from the wedge might be due and, given that this senior pattern was entered from above, a breakout south is the most likely scenario.
If looking at today’s trading session, the pair was testing the strong support of the 55– and 200-hour SMAs near 0.91. The Kiwi might hinder near this level within the following trading hours; however, the general tendency should nevertheless be southwards towards the 23.60% Fibo retracement and the bottom boundary of the senior wedge circa 0.9060.
In case the 0.91 level holds, the nearest upside target for the following sessions could be the six-month high of 0.9180.